Ch 2 Flashcards
(23 cards)
Land
the earth’s surface extending downward to the center of the earth and upward to infinity, including things permanently attached by nature, such as trees and water
Real estate
the land and all things permanently attached to it by either nature or people ( improvements )
Real property
real estate plus the interests, benefits, and rights inherent in the ownership of real estate
In practice: “real estate” and “realty” are casual uses of the term accurately described as “real property”
Bundle of legal rights
Old English Law
Possession- the right to occupy the premises
Control- right to determine certain interests for others
Enjoyment- possession without harassment or interference
Exclusion- legally refusing to create interests for others
Disposition- determining how the property will be disposed of
Appurtenance
right or privilege associated with the property, although not necessarily a part of it
Surface rights
may be sold or leased to others
Subsurface rights
includes rights to minerals and other substances under the earth’s surface. Such rights may be sold or leased to others in the same ways as surface rights and independent of surface ownership.
Air rights
may also be sold or leased independent of surface ownership. Solar or sun rights have become an ownership issue in recent years primarily because of solar energy applications that require direct access to sunlight.
Water rights
held by owners of land adjacent to rivers, lakes, or oceans
Real property vs. Personal property
personal property is all property that does not fit the definition of real property
Personal property
is moveable; also referred to as chattels
Manufactured housing
defined as dwellings that are not constructed at the site but are built off-site and transported to the building lot where they are installed or assembled. Mobile homes, manufactured housing, and modular housing laws vary depending on when and how the housing is permanently attached to the ground.
Plants
Fructus naturales- trees, perennial shrubbery, and grasses not requiring annual cultivation and real property.
Fructus industriales- crops with a growing season of less than a year (annuals), known as emblements, are personal property.
Severance
an item of real property may be changed to personal property through this
Annexation
an item of personal property may become real estate by this
- construction materials routinely become real estate
Fixture
an article that was once personal property but has been so affixed to land or a building that the law now recognizes it as part of the real property
Legal tests of a fixture
overall test is intention of the annexer
- The method of annexation
- The adaptation to real estate
- The existence of an agreement
Trade Fixture
an article owned by a tenant and attached to rented space or a building for use in operating a business
- Tenant’s personal property
- Must remove on or before last day of lease
- Not removed- becomes the landlord’s real property by accession
Economic characteristics of Real Property
SIPL
- Scarcity
- Improvements
- Permanence of Investment
- Location or area preference ( situs )
SIPL: Economic Characteristics
Scarcity: Although the total supply of land is not in short supply, land of a particular quality or location may be limited.
Improvements: can affect both the improved parcel and surrounding parcels, either favorably or unfavorably.
Permanence of Investment: Improvements are considered to create fixed investments
Location or area preference: People’s choices of one area or site over another ( area preference or situs ) are the most important economic characteristic
IIU: Physical Characteristics
Immobility: The geographic location of any given parcel of land can never be changed.
Indestructibility: Land is durable and indestructible, even though erosion, flood, volcanic action, and fire may change its topography and value.
Uniqueness: The law holds that no two parcels of land are exactly the same; this uniqueness is also known as “nonhomogeneity”
Specific areas of Law imp to RE practitioners
- Law of contracts
- General property law
- Law of agency
- State real estate license law
- Federal regulations
- Federal, state, and local tax laws
- Zoning and land use laws
- Environmental regulations
Real estate practitioners may not act as attorneys
Real estate license laws
- Purpose is to protect the public from fraud, dishonesty, and incompetence in real estate transactions.
- Licensing required by all 50 states, District of Columbia, and Canadian provinces
- State laws similar, but differ in detail
- Specific education requirements for licensing
